Document

DEF 14A 1 progressivecorp2021def14a.htm DEF 14A Document

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

(Amendment No. )


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o			Soliciting Material Pursuant to §240.14a-12

THE PROGRESSIVE CORPORATION

(Name of Registrant as Specified in its Charter)


(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

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NOTICE OF ANNUAL MEETING OF SHAREHOLDERS

The Progressive Corporation (NYSE:PGR) will hold its Annual Meeting of Shareholders on Friday, May 7, 2021, at 10:00 a.m., eastern time. The meeting will be held by online webcast only. There will be no physical location for the meeting. You will be able to attend the Annual Meeting, vote, and submit your questions during the meeting via live webcast by visiting www.virtualshareholdermeeting.com/PGR2021. To participate in the meeting, you must have your 16-digit control number that is shown on your proxy card. You will not be able to attend the Annual Meeting in person.

At the Annual Meeting, shareholders will be asked to:

1.Elect as directors the 12 nominees identified in the attached Proxy Statement, each to serve for a term of one year;

2.Cast an advisory vote to approve our executive compensation program;

3.Ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2021; and

4.Transact such other business as may properly come before the meeting.

The foregoing items of business are described more fully in the Proxy Statement accompanying this Notice. Only shareholders of record of The Progressive Corporation at the close of business on March 12, 2021, are entitled to receive notice of and to vote at the meeting or any adjournment or postponement of the meeting.

Your vote is important. Whether or not you plan to participate in the meeting via the live webcast, please vote by Internet or telephone (following the instructions on the enclosed proxy card), or by completing and returning the proxy card in the enclosed postage-paid envelope. If you later choose to revoke your proxy, you may do so by following the procedures described in the “Questions and Answers about the Annual Meeting and Voting” section in the attached Proxy Statement.

By Order of the Board of Directors.

Daniel P. Mascaro, Secretary

March 29, 2021

The Proxy Statement and the 2020 Annual Report to Shareholders

are also available at progressiveproxy.com.

A MESSAGE FROM THE BOARD OF DIRECTORS

March 29, 2021

When we wrote our letter to you last year, we were still in the very early stages of the COVID-19 pandemic. Although some areas of the country were seeing a steep rise in infections, hospitalizations and deaths and stay-at-home orders were beginning to be put in place, little did we know how drastic and prolonged the ultimate effect would be on all of us. Here we are 12 months later and the virus continues to turn our business and personal lives upside down, although we hope the end is in sight.

Crises are learning opportunities and, in this letter, we want to reflect on the year just passed and the role of the Board at a time of significant dislocation and change.

One of the key responsibilities of a Board of Directors is to support and promote a company’s culture and values. That role has never been more important than it has been in the last year. At Progressive, our culture is very strong and the Core Values that underpin it are clearly articulated and understood by all of the members of our “ecosystem”. As detailed in this year’s Annual Report, those Core Values are Integrity, Golden Rule, Objectives, Excellence, and Profit. Those values emphasize both the adherence to uncompromising standards of behavior and the dedication to producing strong results in Progressive’s operations. It is that balance that management, supported by the Board, sought to maintain and enhance despite upheaval in the lives of Progressive’s more than 43,000 employees and the ways in which they were able to perform their roles. Management put in place a number of measures designed to protect the health and security of employees and to help them to adapt to changing circumstances at home including stay-at-home orders, home schooling of children and health issues and concerns. Near-constant communication from our leaders to the Progressive community provided reliable information about the developing pandemic at a time when conflicting information and advice were circulating in social media and elsewhere. Agile decision-making and engagement with functional teams kept employees motivated to continue to collaborate and provide excellent service to customers, agents and other stakeholders in this dispersed environment.

We are very proud of the way in which Progressive’s leadership and employees met the challenges that we faced. More than 95% of our employees transitioned quickly to working from home, while our IT department addressed complex challenges of obtaining and deploying adequate hardware, securing

appropriate telephone and internet service, and safeguarding the security of our systems. Despite the oversupply of people in some functions, we decided early on to maintain employment for our people. It was just the right thing to do. We quickly shifted people between areas, retrained as needed and even lent some of our employees to a government agency that was overwhelmed by pandemic related changes in workload. Recognizing the toll that the pandemic was taking on our communities, we significantly increased our philanthropic activities, donating $8 million through the Progressive Insurance Foundation to charities focused on hunger, health, and homelessness, including Feeding America, the American Red Cross, and the National Alliance to End Homelessness.

The Board was consulted and informed throughout the year as the pandemic’s impacts were felt and new tactics and programs were implemented. We too changed our ways of working, increasing the number of meetings we held and adopting video conferencing technology, supplemented by frequent emails and other communication. Individual board members were always available to reflect on their individual experiences, make suggestions and provide counsel. We are a diverse group of directors, with a wide variety of backgrounds, skills and perspectives. The value of that diversity was clear as we discussed and considered the best ways to safeguard and promote the long-term interests of Progressive and all of our stakeholders.

A second key role of the Board is to oversee the risk identification and mitigation strategies that the company employs including in the areas of business continuity and technology preparedness. We were able to navigate the challenges we faced over the last year in large part because we already had in place many systems, capabilities and plans that were designed to facilitate recovery from catastrophic events. This is not to say, of course, that an event the magnitude of the pandemic had been specifically foreseen, but the preparations in place in early 2020 made the continuation of “business as usual” (and we use that term loosely) feasible, when supplemented by healthy doses of problem solving, ingenuity, adaptability, and sheer human effort. Again, this is not news, as management and the Board have focused on technology capabilities and business continuity planning over the years.

The Audit Committee has historically overseen business continuity on the Board’s behalf, and management routinely reports to that Committee on

these matters. Also, early in 2020, just before the work-from-home realities hit, the Board completed a year-long review process and formed a new Technology Committee that is chartered with oversight of the technology-related aspects of business continuity and, more generally, of the company’s technology and cybersecurity programs as a whole. That Committee has already deepened our ability to provide expertise and value-added oversight in this critical area.

The company’s preparedness for significant disruptions in the business, and the Board’s oversight of those efforts, have been and will remain a critical part of what we do, and we expect that further enhancing technology capabilities and business continuity will be a relentless focus of both management and the Board going forward.

Despite the many immediate challenges and dislocations of the year, the Board did not lose sight of another of its key responsibilities, the definition and oversight of strategy. Progressive has a well-articulated vision and a strategy to achieve that vision, including the pursuit of business opportunities across three “horizons”. Just before the pandemic lockdowns began a year ago, we held a three day meeting to review specific initiatives included in our five year strategic plan. Throughout the year, the Board received updates on various investments and proposed new ventures and considered and discussed the possible impacts of the pandemic on those programs.

As I write today, we have just concluded a very robust and intense strategic review for 2021 (held virtually this time) and we have all been impressed by management’s continued commitment to our objectives and the progress that is being made.

The final dimension of the Board’s role that I want to call out is our responsibility for talent and management succession. The pandemic was not the only challenge that Progressive, our people and our nation faced in 2020. We also confronted social injustice with an intense re-examination of the inequality of opportunity and position in America. At Progressive, we are committed to equity and to building a work force at all levels that reflects both the nation as a whole and the customers we are privileged to serve. While we have made progress in recent years on our Diversity and Inclusion initiatives, we recognize that we have more work to do and are deeply committed as a Board and management team to making clear and demonstrable progress with the objective of being a leader in this area. The Board will continue to report on our efforts and our results.

Before we close, we want to welcome a new addition to our Board, Devin Johnson, who was elected in November and attended his first virtual board meeting in December. Devin is the Chief Operating Officer of The SpringHill Companies. He has extensive experience in digital and social media, marketing and content production and delivery, as well as executive leadership, from his current and prior roles. Devin is the fifth new director we have added since 2017.

We must also say goodbye to our colleague Patrick Nettles who has decided to retire from the Board at the time of our Annual General Meeting in May. Pat has been a director since 2004 and for much of that time has very ably chaired our Audit Committee. Pat has extensive experience in executive leadership, a deep background in technology and an independent and incisive mind. We will greatly miss his engagement and his guidance and wish him the very best in his post-Progressive activities.

Finally, we want to thank all of the Progressive employees who have accomplished so much in the past year and have demonstrated remarkable flexibility, agility, resilience, and dedication to our company. None of all that we have achieved would be possible without them.

We would also like to thank you for your continuing ownership interest in The Progressive Corporation.

On behalf of the Board of Directors,

/s/ Lawton W. Fitt

Chairperson of the Board

The Progressive Corporation

Proxy Statement

Table of Contents



General Information Regarding Proxy Materials and the Annual Meeting of Shareholders			1
Proxy Stateme nt Summary			2
Item 1: Election of Directors			5
Nominees for Director			5
Director Nominee Selection Process			5
Director Nominee Highlights			7
Director Nominee Information			8
Vote Required for Election			14
Director Whose Term Will Not Continue After the Annual Meeting			15
Other Board of Directors Information			15
Board of Directors Independence Determinations			15
Board Leadership Structure and Risk Oversight			15
Meetings of the Board of Directors and Attendance			16
Meetings of the Non-Management and Independent Directors			17
Board Committees			17
Communications with the Board of Directors			19
Transactions with Related Persons			19
Compensation Committee Interlocks and Insider Participation			19
Report of the Audit Committee			20
Security Ownership of Certain Beneficial Owners and Management			21
Security Ownership of Certain Beneficial Owners			21
Security Ownership of Directors and Executive Officers			22
Compensation Discussion and Analysis			24
Overview			24
Compensation Highlights for 2020			24
Impact of COVID-19			25
Our Executive Compensation Program			26
Elements of Compensation – 20 20 Decisions and Awards			27
Other Elements of Compensation			34



Procedures and Policies			36
Related Considerations			39
Compensation Committee Report			40
Compensation Programs and Risk Management			41
Executive Compensation			42
Summary Compensation Table			42
Grants of Plan-Based Awards			44
Narrative Disclosure to Summary Compensation Table and Grants of Plan-Based Awards Table			45
Outstanding Equity Awards at Fiscal Year-End			46
Option Exercises and Stock Vested			48
Nonqualified Deferred Compensation			49
Potential Payments Upon Termination or Change in Control			50
Pay Ratio Disclosure			53
Director Compensation			55
Compensation of Non-Employee Directors At Fiscal Year-End			55
Narrative Disclosure to Director Compensation Table			56
Item 2: Advisory Vote to Approve our Executive Compensation Program			58
Item 3: Proposal to Ratify the Appointment of PricewaterhouseCoopers LLP as Our Independent Registered Public Accounting Firm for 2021			59
Other Independent Registered Public Accounting Firm Information			59
Approval of Audit and Non-Audit Services			59
Independent Registered Public Accounting Firm Fees			60
Other Matters			60
Procedures for Recommendations and Nominations of Directors and Shareholder Proposals			60
Householding			61
Charitable Contributions			62
Solicitation			62
Proxy Voting Matters			62
Questions and Answers a bout the Annual Meeting and Voting			62
Available Information			66

THE PROGRESSIVE CORPORATION

PROXY STATEMENT

GENERAL INFORMATION REGARDING PROXY MATERIALS AND

THE ANNUAL MEETING OF SHAREHOLDERS

The Board of Directors of The Progressive Corporation (NYSE:PGR) provides this Proxy Statement to you to solicit your proxy to act upon the matters outlined in the accompanying Notice of Annual Meeting of Shareholders, each described in more detail in this document.

The Annual Meeting will take place on Friday, May 7, 2021, at 10:00 a.m., eastern time, via a live webcast that is available at: www.virtualshareholdermeeting.com/PGR2021. There will be no physical meeting location and the meeting will only be conducted via the live webcast. Your proxy also may be voted at any adjournment or postponement of the meeting.

The proxy card, this Proxy Statement, and Progressive’s 2020 Annual Report to Shareholders will be mailed to shareholders beginning on or about March 29, 2021.

All proxies that are properly completed and submitted over the Internet or by telephone, and all properly executed written proxies, will be voted at the meeting in accordance with the directions given by the

shareholder, unless the shareholder properly revokes his or her proxy before voting occurs at the meeting. If a shareholder executes and delivers their proxy card without directions on how to vote their shares, then the shares represented by the proxy card will be voted as recommended by the Board of Directors.

Only shareholders of record of The Progressive Corporation at the close of business on March 12, 2021, the record date, are entitled to receive notice of and to vote at the meeting or any adjournment or postponement of the meeting. Each shareholder on the record date is entitled to one vote for each of our common shares, $1.00 par value, held by the shareholder. On the record date, we had 585,153,282 common shares outstanding.

For additional information regarding the proxy materials and the Annual Meeting, see “Questions and Answers About the Annual Meeting and Voting.”

WHETHER OR NOT YOU PLAN TO ATTEND THE VIRTUAL ANNUAL MEETING, THE BOARD OF DIRECTORS STRONGLY ENCOURAGES YOU TO VOTE YOUR SHARES BY PROXY PRIOR TO THE MEETING. YOUR VOTE IS IMPORTANT. PLEASE FOLLOW THE VOTING INSTRUCTIONS CAREFULLY TO MAKE SURE THAT YOUR SHARES ARE VOTED APPROPRIATELY.

PROXY STATEMENT SUMMARY

This summary provides a brief description of our 2020 business performance and highlights certain information contained in this Proxy Statement. It does not contain all of the information you should consider when voting your shares. Please read the entire Proxy Statement carefully before voting.

VOTING MATTERS AND BOARD RECOMMENDATION


Item Number	Voting Matter	Board Recommendation
1	Elect as directors the 12 nominees identified in this Proxy Statement, each to serve for a term of one year	FOR each nominee
2	Cast an advisory vote to approve our executive compensation program	FOR
3	Ratify the appointment of PricewaterhouseCoopers LLP as our independent registered public accounting firm for 2021	FOR

NOMINEES FOR DIRECTOR

The Board has nominated 12 directors, each of whom is a current director, with a broad and complementary set of business skills, experiences, backgrounds, and perspectives.

Diversity

Skills and Experiences

CORPORATE GOVERNANCE HIGHLIGHTS

We are committed to meeting high standards of ethical behavior, corporate governance, and business conduct. Some of our corporate governance practices include:

Effective Structure and Composition

Additional Practices and Policies

Shareholder Rights

✔

Independent, experienced Chairperson

✔

Robust director stock ownership guidelines

✔

Single class voting

✔

Independent committee leadership and strong independent committee membership

✔

Established Board and committee risk oversight practices

✔

Annual election of all directors

✔

A diverse and highly qualified Board

✔

Board technology/cybersecurity expertise

✔

Majority voting in uncontested director elections

✔

Five new directors in the last four years

✔

Environmental, social, and governance oversight and reporting

✔

Proxy access available

✔

Mandatory director retirement policy

✔

Ongoing director education

✔

No poison pill

✔

Independent directors meet regularly without management

✔

Annual Board, committee, and director evaluations

EXECUTIVE COMPENSATION HIGHLIGHTS

We believe that our executive compensation program, including the closely aligned companywide annual cash incentive program we call Gainsharing, has been a critical component of our strong operating results and shareholder returns in recent years. Our compensation program is overseen by the Compensation Committee of the Board, and the 2020 plans were implemented before the dramatic scope and impact of the COVID-19 pandemic became apparent. The performance goals and other plan features established by the committee early in 2020 remained unchanged throughout the year. A more detailed discussion of these matters can be found in the “Compensation Discussion and Analysis” section of this Proxy Statement.

Our executive compensation program has a number of important structural features and guiding policies, including:

What We DO Have

✔ Independent Compensation Committee that establishes compensation for executive officers

✔ Heavy weighting of at-risk “pay for performance” compensation

✔ Below market base salary with opportunity to exceed median with strong performance is typical

✔ Stock ownership guidelines

✔ Clawback/forfeiture provisions (including restatements and reputational harm)

What We DON'T Have

✘ Employment agreements

✘ Guaranteed salary increases or bonuses

✘ Hedging/pledging of our stock

✘ “Timing” of equity awards

✘ “Single-trigger” change in control benefits

✘ Pension plan or supplemental retirement benefits provided to executives

BUSINESS PERFORMANCE HIGHLIGHTS

While 2020 posed many challenges in light of the coronavirus, COVID-19, pandemic, we continued to stay focused on being nimble, while concentrating on our employees and customers. During 2020, we wrote $3.0 billion more in net premiums, compared to 2019, and added nearly 2.4 million policies in force to end the year at $40.6 billion in net premiums written and 24.7 million policies in force. Our underwriting profitability increased 47% in 2020, partially reflecting a decrease in personal auto claims frequency as a result of changing driving patterns, especially in the early months of the pandemic, due to the social distancing and shelter-in-place restrictions put in place to help mitigate the impact of the virus. In response to lower loss costs and to provide policyholders some financial relief, during 2020 we issued $1.1 billion of credits to our personal auto policyholders and implemented billing leniency efforts for a period of time to ensure that our personal auto customers would not be cancelled or non-renewed for a lack of payment.

Our investment portfolio returns also experienced volatility during the year due to the pandemic and economic shutdowns. We were well positioned entering 2020 with a relatively conservative portfolio and were able to weather the market movements

during the year to generate a fully taxable equivalent total return of 7.9% on our investment portfolio. In addition, in light of our strong capital position, we returned $4.50 per common share to our shareholders through our annual dividend, in addition to the $0.40 per share we returned on a quarterly basis during the year. We ended 2020 with $22.4 billion of total capital and a debt to total capital ratio of 24.1%. Following are a few key performance metrics for 2020:


Net premiums written growth	8	%
Policies in force growth	11	%
Combined ratio	87.7
Underwriting margin	12.3	%
Returns on average common shareholders' equity (attributable to Progressive):
Net income	35.6	%
Comprehensive income	39.3	%
Net income	$5.7 billion
Net income per common share	$9.66
Declared shareholder dividends	$2.9 billion

We encourage you to review our Annual Report to Shareholders for additional information on our 2020 performance and our financial results.

ITEM 1: ELECTION OF DIRECTORS

Our Code of Regulations establishes the number of directors at no fewer than five and no more than 13. The number of directors has been fixed at 13, and there are currently 13 directors on the Board. As we have previously announced, Patrick H. Nettles, Ph.D., is retiring from the Board of Directors on the date of the Annual Meeting, which will leave 12 directors on our Board at that time. As stated in our Corporate Governance Guidelines, the Board may change the size of the Board from time to time depending on its needs and the availability of qualified candidates. Most recently, in November 2020, the size of the Board was increased from 12 to 13 members to accommodate the addition of a new director, Devin Johnson. We currently expect that, at the time of Dr. Nettles’ retirement, the Board of Directors will reduce the size of the Board back to 12 members, and in this proposal, we are asking shareholders to elect as directors the 12 nominees named below. Accordingly, after these events occur, we do not anticipate that there will be a vacancy on the Board.

Each director elected will serve a one-year term and until his or her successor is duly elected. If, by reason of death or other unexpected occurrence, any one or more of the nominees named below is not available for election, the proxies will be voted for substitute nominee(s), if any, as the Board of Directors may propose.

NOMINEES FOR DIRECTOR

Based upon a recommendation from the Board’s Nominating and Governance Committee, the Board has nominated the following persons for election to the Board:

•Philip Bleser

•Stuart B. Burgdoerfer

•Pamela J. Craig

•Charles A. Davis

•Roger N. Farah

•Lawton W. Fitt

•Susan Patricia Griffith

•Devin C. Johnson

•Jeffrey D. Kelly

•Barbara R. Snyder

•Jan E. Tighe

•Kahina Van Dyke

Information regarding the nominees can be found below under “– Director Nominee Highlights” and “ – Director Nominee Information.”

The Board of Directors recommends that you vote FOR the election of each nominee.

DIRECTOR NOMINEE SELECTION PROCESS

The Board is responsible for recommending director candidates for election by the shareholders and for electing directors to fill vacancies or newly created directorships. The Board has delegated the screening and evaluation process for director candidates to the Nominating and Governance Committee, which identifies, evaluates, and recruits highly qualified director candidates and recommends them to the Board.

Qualifications, Experiences, and Skills

The Nominating and Governance Committee evaluates each director candidate individually when considering whether he or she should be nominated to serve on the Board. The committee looks for candidates who have demonstrated the ability to satisfy the fundamental criteria set forth in the committee’s charter, including:

•Integrity

•Judgment

•Commitment

•Participation

•Preparation

•Contribution

and who possess the general qualities required to serve successfully as a director, including:

•Intelligence

•Thoughtfulness

•Diligence

The committee reviews the extent of the candidate’s demonstrated excellence and success in his or her chosen career and the specific skills the candidate would be expected to add to the Board.

In addition to the qualifications that each director nominee must have, the Board believes that one or more of its Board members should possess the following experiences and expertise because of their particular relevance to the company’s business, strategy and structure. These experiences and expertise were considered by the committee in connection with this year’s director nomination process.

•Accounting & Finance

•Highly Regulated Businesses

•Corporate Governance

•Insurance/Financial Services

•Investment & Capital Management

•Leadership

•Retail/Marketing

•Risk Management

•Technology/Cybersecurity

The committee also considers the Board’s needs, the qualifications of other available candidates, and how the addition of the candidate to, or the continued service on, the Board would enhance the Board’s overall diversity and capabilities.

Diversity

The Board’s policy is to include individuals with a wide variety of talents, skills, experiences, and perspectives, in addition to considering demographic criteria such as gender, race, sexual orientation, ethnicity, and age, whenever possible. The directors believe that such diversity provides the Board with broader perspectives, a wide array of thoughts and ideas, and insight into the views and priorities of our diverse investor, customer, agent, and employee bases.

To evaluate the impact of the addition of a candidate on the diversity of the Board, the committee considers how distinct the candidate’s background, experiences, skills, and personal characteristics are from those of the incumbent directors and whether the candidate would bring a unique perspective to the Board. The committee assesses the effectiveness of its practices for consideration of diversity in nominating director candidates by periodically analyzing the diversity of the Board as a whole and, based on that analysis, determining whether it may be desirable to add to the Board a director with a certain type of background, talent, experience, personal characteristic, skill, or a combination thereof.

DIRECTOR NOMINEE HIGHLIGHTS

Director Nominee Diversity

We are one of a few companies in the Fortune 500 with both a female CEO and a female independent Board chairperson. The nominees include a diverse mix of directors.

Director Experiences, Qualifications, Attributes, and Skills

The Board believes that it is desirable that the following experiences, qualifications, attributes, and skills be possessed by one or more of its Board members because of their particular relevance to the company’s business and structure, and these were all considered by the Nominating and Governance Committee in connection with this year’s director nomination process:

Accounting & Finance

Highly Regulated Businesses

Corporate Governance

Insurance/ Financial Services

Investment & Capital Management

Leadership

Retail/Marketing

Risk Management

Technology/Cybersecurity

Philip Bleser

Stuart B. Burgdoerfer

Pamela J. Craig

Charles A. Davis

Roger N. Farah

Lawton W. Fitt

Susan Patricia Griffith

Devin C. Johnson

Jeffrey D. Kelly

Barbara R. Snyder

Jan E. Tighe

Kahina Van Dyke

DIRECTOR NOMINEE INFORMATION

The following information is provided for each nominee and includes descriptions of each nominee's specific experience, qualifications, attributes, and skills that led the Nominating and Governance Committee and the Board to conclude that he or she should serve on the Board of Directors. Unless otherwise indicated, each nominee has held the principal occupation indicated for more than five years. Current directorships at other public companies and former directorships held during the last five years are also shown. The term of each current director expires at the Annual Meeting.


Name (Age)	Principal Occupation, Business Experience, and Qualifications	Other Directorships
Philip Bleser (66) Director since: 2017	Retired; Chairman of Global Corporate Banking, JPMorgan Chase & Co., New York, New York (financial services) from April 2015 through June 2016; Head of Global Corporate Banking, North America, JPMorgan Chase & Co., prior to April 2015 Prior to retiring in 2016, Mr. Bleser served on the executive leadership team at JPMorgan Chase (JPM), a preeminent commercial bank and financial services company, where he led the firm’s global corporate banking efforts. In these roles, Mr. Bleser’s responsibilities included, among others, strategic direction and execution, risk management, and operations of a global, technology- and customer-driven corporate banking operation. His financial and operational roles positioned him to understand the challenges and opportunities faced by JPM’s largest corporate clients and to evaluate the strategic decisions made by those businesses. Mr. Bleser also serves on the board of a specialty retail company, enhancing his experience in the areas of public company governance and the operations of its audit and nominating and corporate committees, as well as deepening his understanding of a consumer-facing retail business.	Current Francesca's Holding Corp. Former None

	Key Skills: Accounting & Finance Highly Regulated Businesses Corporate Governance Insurance/Financial Services Investment & Capital Management Leadership Retail/Marketing Risk Management


Name (Age)	Principal Occupation, Business Experience, and Qualifications	Other Directorships
Stuart B. Burgdoerfer (58) Director since: 2009	Executive Vice President and Chief Financial Officer, L Brands, Inc., Columbus, Ohio (retailing); Interim Chief Executive Officer of VS NewCo. (retailing) from May 2020 to February 2021 Mr. Burgdoerfer has been selected to serve as a director of the company because he has substantial experience in leadership roles as a financial professional and senior executive. His experience includes work as a CPA at Deloitte, as a management consultant and in financial leadership roles at a PepsiCo/YUM Brands subsidiary, Pizza Hut and as Senior Vice President of Finance at The Home Depot. Mr. Burgdoerfer’s experience also includes service as a member of the Board of Trustees at Spelman College. Mr. Burgdoerfer has been the Executive Vice President and Chief Financial Officer of L Brands since April of 2007, and served from May 2020 through February 2021 as Interim Chief Executive Officer of L Brand's subsidiary Victoria's Secret (VS NewCo), expanding his executive and leadership responsibilities at this global retail company. In February 2021, Mr. Burgdoerfer notified L Brands of his intent to retire in August 2021. Mr. Burgdoerfer enhances the Board's financial expertise and is a valuable member of our Audit Committee as an Audit Committee Financial Expert.	Current None Former None

	Key Skills: Accounting & Finance Corporate Governance Investment & Capital Management Leadership Retail/Marketing Risk Management
Pamela J. Craig (64) Director since: 2018	Retired Chief Financial Officer, Accenture PLC, Dublin, Ireland (global management consulting) Ms. Craig is the former Chief Financial Officer of the global professional services firm, Accenture PLC. Ms. Craig worked at Accenture for 34 years in a variety of consulting and executive roles, where she developed extensive finance, capital management, operational, enterprise risk management, and technology expertise, as well as leadership experience in the context of a large, growth-oriented organization. In addition, her current and past service as a director of other significant public companies, and as a member of their audit, compensation, and governance committees, provide her with valuable experience in addressing the many risks and governance issues facing public companies.	Current Merck & Co., Inc. 3M Company Former Akamai Technologies, Inc. Walmart Inc.

	Key Skills: Accounting & Finance Corporate Governance Investment & Capital Management Leadership Risk Management Technology/Cybersecurity


Name (Age)	Principal Occupation, Business Experience, and Qualifications	Other Directorships
Charles A. Davis (72) Director since: 1996	Chief Executive Officer, Stone Point Capital LLC, Greenwich, Connecticut (private equity investing) Mr. Davis has broad financial, investment, and capital management expertise developed through his work at Goldman Sachs Group, investment management experience at MMC Capital, Inc., and as Chief Executive Officer of Stone Point Capital LLC. Mr. Davis has extensive knowledge of Progressive’s business and history, which he has gained through his service as a director of the company since 1996. He has substantial corporate governance and risk expertise from his decades of investment banking and private equity experience, as well as his service on the boards of other public and private companies.	Current AXIS Capital Holdings Limited The Hershey Company Former None

	Key Skills: Accounting & Finance Highly Regulated Businesses Corporate Governance Insurance/Financial Services Investment & Capital Management Leadership Risk Management
Roger N. Farah (68) Director since: 2008	Retired; Executive Director, Tory Burch LLC, New York, New York (retailing) from March 2017 through December 2017; Co-Chief Executive Officer, Tory Burch LLC, prior to March 2017 Mr. Farah was chosen to serve as a director principally due to his experience serving in executive officer positions at Ralph Lauren Corporation and Tory Burch LLC and his director position at other public companies. The extensive management and operational experience Mr. Farah has in over 40 years in the retail industry enables him to provide insights, particularly in the area of customer trends, product development, brand management, and risk analysis, from a consumer-focused industry that is different than the property and casualty insurance industry. He also has significant experience addressing the risks and corporate governance issues facing public companies.	Current CVS Health Corporation Former Aetna, Inc. Metro Bank PLC Tiffany & Co.

	Key Skills: Accounting & Finance Corporate Governance Leadership Retail/Marketing Risk Management


Name (Age)	Principal Occupation, Business Experience, and Qualifications	Other Directorships
Lawton W. Fitt (67) Director since: 2009	Chairperson of the Board, The Progressive Corporation, Mayfield Village, Ohio since May 2018; Lead Independent Director, Progressive, from May 2016 to May 2018; Retired Partner, Goldman Sachs Group, New York, New York (financial services) Ms. Fitt brings a strong financial and corporate governance background to her service as Chairperson of our Board of Directors. She has substantial experience in the areas of investment banking and risk analysis, including insight into the operation of capital markets, as a result of her work as a partner at Goldman Sachs Group. In addition, she attained executive management experience through her work as the Secretary of the Royal Academy of Arts in London. Ms. Fitt’s service as a director at various other for-profit and non-profit organizations also factored into the decision to select her to serve on the Board of Directors.	Current Ciena Corporation The Carlyle Group Inc. Micro Focus International plc Former ARM Holdings plc

	Key Skills: Accounting & Finance Highly Regulated Businesses Corporate Governance Insurance/Financial Services Investment & Capital Management Leadership Risk Management
Susan Patricia Griffith (56) Director since: 2016	President and Chief Executive Officer, The Progressive Corporation, Mayfield Village, Ohio since July 2016; Personal Lines Chief Operating Officer prior to July 2016; Vice President prior to June 2016 Mrs. Griffith has been with the company since 1988 and has held a series of executive leadership positions, including Chief Executive Officer (since 2016), Chief Human Resource Officer, Claims Group President (in charge of the entire Claims organization), President of Customer Operations (overseeing the contact center (sales and delivery), customer experience, systems experience, and workforce management groups), and Personal Lines Chief Operating Officer, where she oversaw the Personal Lines, Claims, and Customer Relationship Management groups. Mrs. Griffith’s intimate knowledge of the company and her leadership experience give her a deep understanding of our culture, operations, challenges, and opportunities.	Current FedEx Corporation Former The Children's Place, Inc.

	Key Skills: Highly Regulated Businesses Corporate Governance Insurance/Financial Services Leadership Retail/Marketing Risk Management


Name (Age)	Principal Occupation, Business Experience, and Qualifications	Other Directorships
Devin C. Johnson (47) Director since: 2020	Chief Operating Officer, The SpringHill Company (global consumer and entertainment) since April 2020; President and Chief Operating Officer, UNINTERRUPTED, LLC (entertainment and media) prior to April 2020 Mr. Johnson brings a strong history of executive management and operational experience in digital and social media, brand creation and marketing and content production. Mr. Johnson has extensive leadership experience in marketing, understanding and applying consumer insights, media and content delivery in the consumer products arena, and start-up and business development. His education includes an MBA from The Fuqua School of Business at Duke University, as well as a BBA from the University of Michigan. Through his roles as the Chief Operating Officer of The SpringHill Company and previously as the President of UNINTERRUPTED, LLC, he has gained expertise in creating culturally inspired brands, entertainment, and products.	Current None Former None

	Key Skills: Accounting & Finance Leadership Retail/Marketing Technology/ Cybersecurity
Jeffrey D. Kelly (67) Director since: 2012 Prior service: 2000-2009	Retired; Chief Operating Officer and Chief Financial Officer, RenaissanceRe Holdings Ltd., Pembroke, Bermuda (reinsurance services) prior to September 2016 Mr. Kelly brings a strong history of executive management, investment management, capital markets, and operational experience in the financial services industry. Among other responsibilities, he has served as the principal financial officer at a major commercial bank and a large reinsurer. Mr. Kelly's experience on the Board gives him insight into our insurance and investment operations. Due to his past roles at RenaissanceRe, Mr. Kelly also provides a different perspective about the insurance industry and understanding of reinsurance markets. Mr. Kelly's financial expertise is utilized in his role as an Audit Committee Financial Expert on our Audit Committee.	Current None Former None

	Key Skills: Accounting & Finance Highly Regulated Businesses Corporate Governance Insurance/Financial Services Investment & Capital Management Leadership Risk Management


Name (Age)	Principal Occupation, Business Experience, and Qualifications	Other Directorships



Barbara R. Snyder (65) Director since: 2014	President, The Association of American Universities (higher education) since October 2020; President, Case Western Reserve University, Cleveland, Ohio, prior to October 2020 Ms. Snyder has extensive leadership experience as the President of Case Western Reserve University for 13 years and her recent appointment as President of The Association of American Universities (AAU), as well as leadership positions she has held at non-profit and university organizations and as a member of the board of directors of a large financial services company. At Case she led a revitalization of the school, while overseeing enhancements of academic excellence, faculty collaboration, strategic planning, fundraising efforts, cybersecurity initiatives, and the qualifications and diversity of Case’s student body. Her executive role at a leading university, and now the broader outlook that comes with the presidency of AAU, an organization representing America's leading research universities, brings a unique perspective to our Board.	Current KeyCorp Former None

	Key Skills: Highly Regulated Businesses Insurance/Financial Services Leadership Retail/Marketing Risk Management Technology/Cybersecurity
Jan E. Tighe (58) Director since: 2019	U.S. Navy, Vice Admiral, Retired; Deputy Chief of Naval Operations for Information Warfare and Director of Naval Intelligence, U.S. Navy (military), from July 2016 to July 2018; Fleet Commander, U.S. Fleet Cyber Command/U.S. Tenth Fleet, U.S. Navy, prior to July 2016 Prior to retiring, Vice Admiral Tighe served in the U.S. Navy for 38 years, including leadership roles in the Navy and for the National Security Agency. She most recently served as the Deputy Chief of Naval Operations for Information Warfare and Director of Naval Intelligence, and as a member of the U.S. Navy’s Corporate Board. Vice Admiral Tighe also had prior leadership positions in U.S. Cyber Command, the Navy’s Fleet Cyber Command, and as President of the Navy’s Postgraduate School. A graduate of the U.S. Naval Academy and the Naval Postgraduate School, she holds a M.S. in Applied Mathematics and a Ph.D. in Electrical Engineering. She has been a Governance Fellow of the National Association of Corporate Directors since August 2018 and is a director at two other public companies. Vice Admiral Tighe brings to the Board extensive leadership and operational experience in complex cybersecurity matters, information technology systems, technology risk management, and strategic assessment, planning, and implementation.	Current The Goldman Sachs Group, Inc. Huntsman Corporation Former None

	Key Skills: Highly Regulated Businesses Corporate Governance Leadership Risk Management Technology/Cybersecurity


Name (Age)	Principal Occupation, Business Experience, and Qualifications	Other Directorships
Kahina Van Dyke (49) Director since: 2018	Global Head, Digital Channels and Client Data Analytics, Standard Chartered PLC, London, England (international banking) since February 2020; Senior Vice President of Business and Corporate Development, Ripple Labs, Inc., San Francisco, California (global digital payments network) from July 2018 through December 2019; Global Director of Financial Services & Payment Partnerships, Facebook, Inc., Menlo Park, California (online social media) from October 2017 through May 2018; Global Director of Payment Partnerships & Commerce, Facebook, Inc., prior to October 2017 Ms. Van Dyke is the Global Head, Digital Channels and Client Data Analytics at Standard Chartered's Corporate Commercial and Institutional Banking Division where she is focused on developing a digital banking platform for global trade, commerce, and financial services. In previous roles at Ripple and Facebook, she was responsible for strategic partnerships and investments across the global financial and technology industries and working with external companies to develop and grow financial products and services. She brings to our Board extensive senior management experience in international consumer and corporate banking combined with leadership at a major technology company, and she is a global female leader in emerging digital banking models and financial technology. She is also the Founder and Chair of the Global Women Executive Leadership Council, a group that promotes leadership and peer mentoring for women in more than 70 countries.	Current None Former None

	Key Skills: Insurance/Financial Services Investment & Capital Management Leadership Retail/Marketing Technology/Cybersecurity

VOTE REQUIRED FOR ELECTION

Proxies cannot be voted at the Annual Meeting for a greater number of persons than the 12 nominees named in this Proxy Statement.

A nominee for director in an uncontested election will be elected as a director only if he or she receives a majority of the votes cast, which is sometimes referred to as a majority voting standard. If the election for directors is contested (that is, there are more nominees than the number of director positions up for election), the majority voting standard does not apply, and the nominees receiving the highest number of votes will be elected (a plurality voting standard). The election of directors at this year’s Annual Meeting is an uncontested election, so each nominee must receive a majority of the votes cast to be elected. Abstentions and unvoted shares (including broker non-votes) will not be considered as votes cast.

If an incumbent director is not elected by a majority of the votes cast in an uncontested election, the director is not automatically removed from the Board, but

under our Corporate Governance Guidelines, he or she is expected to tender a resignation from the Board within 10 days after the certification of the shareholder vote. If that resignation is not made contingent on the Board’s determination to accept or reject such resignation, the resignation will be effective immediately. If the resignation is contingent on Board action, the Board will review the resignation under procedures set forth in our Corporate Governance Guidelines and announce its determination whether to accept or reject the resignation within 120 days from the certification of the shareholder vote. If a director is not elected by a majority of the votes cast, but fails to tender his or her resignation during the 10-day period after certification, his or her term of office will expire automatically upon the expiration of the 10-day period.

If written notice is given by any shareholder to the President, a Vice President, or the Secretary not less than 48 hours before the time fixed for holding the Annual Meeting that he or she desires that the voting for election of directors be cumulative, and if an announcement of the giving of such notice is made at the meeting by the Chairperson or Secretary or by or on behalf of the shareholder giving such notice, each shareholder will have the right to cumulate his or her voting power in the election of directors. Under cumulative voting, each shareholder may give one nominee a number of votes equal to the number of directors to be elected, multiplied by the number of shares he or she holds, or distribute such number of votes among the nominees, as the shareholder sees fit. If the enclosed proxy is executed and returned, or the shareholder submits their proxy by telephone or over the Internet, and voting for the election of

directors is cumulative, the persons named as their proxies on the proxy card will have the authority to cumulate votes and to vote the shares represented by their proxy, and by other proxies held by them, so as to elect as many of the 12 nominees named above as possible.

DIRECTOR WHOSE TERM WILL NOT CONTINUE AFTER THE ANNUAL MEETING

Patrick H. Nettles, Ph.D., has decided to retire from the Board on the date of our Annual Meeting in 2021. Dr. Nettles has served on the Board since 2004 and has brought valuable experience that he gained through his leadership experiences as Chairman of the Board and Chief Executive Officer of Ciena Corporation. The Board has also benefited from Dr. Nettles’ extensive technical experience, including his experience with telecom and data networking, working as an engineer and engineering manager and his Ph.D. in Physics. Dr. Nettles has served as the Chair of the Audit Committee, and as a financial expert, for many years and has been a member of the Technology Committee since its creation last year. Progressive thanks Dr. Nettles for his dedicated service and the many contributions he made during his tenure on the Board.

OTHER BOARD OF DIRECTORS INFORMATION

BOARD OF DIRECTORS INDEPENDENCE

DETERMINATIONS

We are required to have a majority of independent directors under New York Stock Exchange (NYSE) Listing Standards. The NYSE’s standards prescribe specific independence tests and require the Board to make affirmative independence determinations regarding each of our directors. Accordingly, the Board has considered the independence of our current Board members. In conducting this review, the Board took into account each director's current employment situation (if any) and other relationships that could impact the independence determination under NYSE rules, including certain transactions that took place in 2020 or are expected in 2021 between Progressive and companies with which the director is affiliated. Specifically, the Board considered ordinary course transactions involving reinsurance, cyber liability insurance, claims resolution and administration, employee health and welfare plan administration, data and software services, and background checks for potential employees, among others. Based on this review, the Board determined that each of our current directors is independent under the NYSE standards, other than Mrs. Griffith, who is an executive officer of the company.

BOARD LEADERSHIP STRUCTURE AND RISK OVERSIGHT

Lawton Fitt has been Chairperson of the Board since May 2018. Ms. Fitt is independent from management under NYSE rules, and she has a strong business background, executive management experience, and additional experience as a member of a number of public company boards. Ms. Fitt’s knowledge of our businesses acquired as a Board and committee member, her demonstrated willingness to challenge management and the status quo, and her ability to establish an effective working relationship with Mrs. Griffith in her current role and prior role as Lead Independent Director, also contributed to the Board’s decision to elect Ms. Fitt as Chairperson of the Board.

The Board of Directors is ultimately responsible for overseeing our risk profile and risk management processes. To facilitate these responsibilities, the Board assigns certain risk oversight to each of its main committees. The Nominating and Governance Committee oversees the allocation of risk among the committees and makes appropriate recommendations to the Board. Each committee regularly reports to the full Board on the risks that it oversees.

The Audit Committee, oversees risks relating to financial statements, financial controls, internal and external audit functions, and external reporting. In addition, the committee monitors our Enterprise Risk Management (ERM) program. These responsibilities

include the review of the guidelines, policies, and procedures that govern how we assess and manage our exposure to risk, and meeting periodically with management – including leaders and other representatives of the risk management department, compliance and ethics group, law department, control and analysis (internal audit), physical and information security group, external auditors, and other business units as necessary – to review our major operational, financial, reputational, and other risk exposures, as well as the steps management has taken to identify, monitor, assess, and mitigate such exposures. Our Management Risk Committee (MRC), which comprises members of management representing a cross-section of business units and functions, regularly performs an enterprise risk assessment and, with input from executive management, identifies the most critical risks facing the company. The MRC then formulates recommendations for managing those risks, which it presents to the Audit Committee for review. While the oversight of ERM and the MRC entails a broader focus than the other committees, the Audit Committee is not responsible for risks that are overseen by the other committees.

The Compensation Committee regularly reviews any major risks arising from our compensation plans and programs, and executive and director compensation decisions. The committee also oversees our diversity and inclusion efforts and related risks.

The Investment and Capital Committee oversees our investment policy, which is designed to enable us to meet our business and financial objectives with a reasonable balance among risk, return, and cost. The Investment and Capital Committee also is responsible for ensuring that we have a capital plan that takes risk factors into consideration, and that risk is appropriately taken into consideration in connection with proposed strategic investments.

In addition to monitoring the risk allocation among the committees, the Nominating and Governance Committee is responsible for overseeing and addressing with management risks relating to the Board’s and the company’s governance practices, and environmental and social factors and initiatives impacting us. The committee further coordinates efforts relating to succession planning for executives and directors, assesses the qualifications and diversity of directors, and makes recommendations to the Board on potential candidates for election to the Board.

The Technology Committee, which was newly formed in 2020, continues oversight on the Board’s behalf of the company’s technology and information security risks, which had previously been the responsibility of the Audit Committee. The Technology Committee reviews the major risks arising from our technology,

digital and data strategies, legacy systems, technology investments and operations, cybersecurity programs, and technology-related business continuity and disaster recovery programs. The committee also oversees management’s efforts to mitigate these risks.

The assignment of the Board’s risk oversight function as described above enables the Board to function more effectively because the whole Board is required to focus only on those risk issues deemed most critical by the applicable committee. On the other hand, the committees provide a deeper focus on overseeing management with respect to the full range of risks we confront. The Board’s Chairperson, Ms. Fitt, consults with the committee Chairs, as necessary, to ensure that significant risk issues are brought to the attention of the full Board. Otherwise, the Board’s administration of its risk oversight function has not affected the Board’s leadership structure.

MEETINGS OF THE BOARD OF DIRECTORS AND ATTENDANCE

During 2020, the Board of Directors held seven meetings and adopted resolutions by written action pursuant to Ohio corporation law on one occasion.

All directors attended at least 75% of their scheduled Board and committee meetings during their tenure in 2020.

Pursuant to our Corporate Governance Guidelines, directors are expected to attend our Annual Meeting of Shareholders whenever possible. Normally, a meeting of the Board is scheduled on the date of the Annual Meeting. Our 2020 Annual Meeting was attended by all of the then current directors.

A copy of our Corporate Governance Guidelines can be found on our website at progressive.com/governance.

MEETINGS OF THE NON-MANAGEMENT AND INDEPENDENT DIRECTORS

Our non-management directors meet in executive session periodically throughout the year, typically at the conclusion of regularly scheduled Board meetings. In the event that the Chairperson is not available to lead the meetings of non-management directors, the presiding director would be chosen by the non-management directors in attendance. In 2020, the non-management directors met in

executive session five times, and each meeting of the

non-management directors also was a meeting of the independent directors.

BOARD COMMITTEES

The Board has named an Executive Committee, an Audit Committee, a Compensation Committee, an Investment and Capital Committee, a Nominating and Governance Committee, and a Technology Committee, as described below. The written charter for each of the committees (other than the Executive Committee, which does not have a charter) can be found on our website at progressive.com/governance.

The following table summarizes the Board’s current committee assignments:

Name

Audit

Compensation

Investment
and Capital

Nominating
and
Governance

Technology

Executive

Philip Bleser

Stuart B. Burgdoerfer

ü*

Pamela J. Craig

Charles A. Davis

Roger N. Farah

Lawton W. Fitt

Susan Patricia Griffith

Devin C. Johnson1

Jeffrey D. Kelly

ü*

Patrick H. Nettles, Ph.D.

Barbara R. Snyder

Jan E. Tighe

Kahina Van Dyke

1 Mr. Johnson was elected to the Board in November 2020 and has not yet been assigned to a committee. When a director initially joins the Board, they generally are not assigned to a committee immediately. Instead, they are invited to attend meetings of the various committees to learn about the company, the other directors, and the responsibilities of each committee.

üMember of the committee

C Chair of the committee

* Audit Committee Financial Expert

Audit Committee. The Audit Committee is responsible for ensuring that the organizational structure, policies, controls, and systems are in place to monitor and accurately report performance. The Audit Committee monitors the integrity of our financial statements, our

financial reporting processes, internal control over financial reporting, and the public release of financial

information, and oversees our compliance and ethics and risk management programs. The committee also is responsible for confirming the independence of, and the selection, appointment, compensation, retention, and oversight of the work of, our independent registered public accounting firms. The committee provides an independent channel to

receive appropriate communications from employees, shareholders, auditors, legal counsel, bankers,

consultants, and other interested parties. The Board of Directors has determined that each of the members of the Audit Committee is financially literate, has no relationship to Progressive that may interfere with the exercise of his or her independence from management and Progressive, and is independent as

defined in the applicable SEC rules and NYSE Listing Standards. During 2020, the Audit Committee met 10 times and adopted resolutions by written action pursuant to Ohio corporation law on one occasion.

The Board of Directors has determined that each of Dr. Nettles, Mr. Burgdoerfer, and Mr. Kelly is an Audit Committee Financial Expert, as that term is defined in the applicable Securities and Exchange Commission (SEC) regulations, and that each has accounting or

related financial management expertise, as required by the NYSE Listing Standards. Dr. Nettles is the current Executive Chairman of the Board of Ciena Corporation and its former Chief Executive Officer, a former Chief Financial Officer, and has been a member of our Audit Committee since 2005. Mr. Burgdoerfer is the Chief Financial Officer of L Brands, Inc. and was formerly the Senior Vice President of Finance of a major retail company. Mr. Kelly was formerly the Chief Operating Officer and Chief Financial Officer of RenaissanceRe Holdings Ltd., and previously served as the Chief Financial Officer at a major commercial bank.

Compensation Committee. The Compensation Committee is composed entirely of independent directors, each of whom, the Board has determined, also satisfies the additional requirements for independence of a compensation committee member under NYSE rules. The Compensation Committee makes final determinations regarding executive compensation, including salary, equity-based awards, and annual cash incentive targets, and related performance goals, formulae, and procedures. The committee (or in certain circumstances, the full Board of Directors, based on the committee’s recommendation) also approves the terms of the various compensation and benefit plans in which executive officers and other employees may participate. Committee decisions are made after considering third-party compensation data for comparable companies, internal analyses, and recommendations presented by management. The executive compensation decisions for executive officers generally represent the culmination of extensive analysis and discussion, which typically take place over the course of multiple committee meetings and in meetings between the committee and management, including our Chief Executive Officer, our Chief Human Resource Officer, members of our compensation and law departments, and sometimes compensation consultants. In addition, the committee frequently reports to the full Board of Directors on executive compensation matters.

The committee’s determinations regarding incentive compensation for executive officers (for example, performance criteria and standards relating to “Gainsharing,” our annual cash incentive program) generally also apply to incentive plans covering most other employees. Under this program, executives and non-executives alike are motivated to achieve the same performance objectives. The committee has delegated to management the authority to implement such plans, and make other compensation-related decisions (such as salary and equity-based awards), for employees other than executive officers. During 2020, the Compensation Committee met six times

and adopted resolutions by written action pursuant to Ohio corporation law on four occasions.

The committee has the authority under its charter to hire its own compensation consultants, at Progressive’s expense. During 2020, the committee used Semler Brossy Consulting Group, LLC (“Semler Brossy”) to advise the committee with respect to certain aspects of executive officer and director compensation. The committee determined that Semler Brossy does not have a conflict of interest.

During 2020, management retained both Pearl Meyer & Partners and Pay Governance LLC to provide comparative compensation information and analyses for our executive officers and directors, among other assignments. The company determined that neither Pearl Meyer nor Pay Governance have a conflict of interest.

Investment and Capital Committee. The Investment and Capital Committee’s responsibilities include monitoring: whether the company has adopted and adheres to rational and prudent investment and capital management policies; whether management’s investment and capital management actions are consistent with our investment policy, financial objectives, and business goals; our compliance with legal and regulatory requirements, as well as internal guidelines, pertaining to investment and capital management; the competence and performance of the company’s internal and external money managers, and the compensation of external money managers; the company’s Strategy Group and proposed strategic investments; and such other matters as the Board or the committee deems appropriate. The committee does not make operating decisions about money manager selection or compensation, asset allocation, market timing, sector rotation, or security selection, which are the responsibilities of management. The full Board of Directors must approve significant changes to the company’s capital structure, dividend policy, or portfolio asset allocation, as well as significant strategic investments. During 2020, the Investment and Capital Committee met eight times.

Nominating and Governance Committee. The Nominating and Governance Committee is composed entirely of independent directors. Among other responsibilities, the committee considers the qualifications of individuals who are proposed as possible nominees for election to the Board and makes recommendations to the Board with respect to such potential candidates. The committee also oversees the procedures for evaluating director, committee, and Board performance.

The committee also is responsible for monitoring corporate governance matters affecting the Board

and the company. The committee regularly reviews our Corporate Governance Guidelines to ensure that they continue to correspond to and support the Board’s governance philosophy. The committee considers and, where appropriate, recommends to the Board for approval, changes to the Corporate Governance Guidelines based on suggestions from its members, other Board members, or management. The committee also oversees environmental and social concerns impacting us. The Nominating and Governance Committee met six times and adopted resolutions by written action pursuant to Ohio corporation law on one occasion during the year.

The Nominating and Governance Committee welcomes input from shareholders regarding potential director nominees. Shareholders can recommend a candidate for consideration by the committee by following the procedures described under “Other Matters – Procedures for Recommendations and Nominations of Directors and Shareholder Proposals.”

Technology Committee. The Technology Committee is responsible for overseeing the use of technology in executing our business strategies. These responsibilities include oversight of technology strategies (including digital strategies), technology investments, cybersecurity programs, operational performance, technology-related business continuity and disaster recovery efforts, and related industry trends. Prior to May 2020, the Audit Committee was responsible for overseeing these areas on behalf of the Board. Recognizing the importance of information technology and cybersecurity to the company’s business, the Board established a new committee focused on information technology (IT) and security in early 2020. The committee, which is comprised of directors with technology and cybersecurity experience, had its inaugural meeting in May 2020 and met a total of three additional times during the year. At each of those meetings, the committee received updates from the company’s Chief Information Officer and Chief Security Officer, among other members of management, on technology investments, IT programs and operations, and the company’s information security programs and efforts, as well as the company’s technology-related responses to the challenges imposed by the COVID-19 pandemic.

Executive Committee. The Executive Committee exercises all powers of the Board between Board meetings, except the power to fill vacancies on the Board or its committees and the power to adopt amendments to our Code of Regulations. During 2020, the Executive Committee met on one occasion and adopted resolutions by written action pursuant to Ohio corporation law on five occasions.

COMMUNICATIONS WITH THE BOARD OF DIRECTORS

Shareholders or other interested parties may send written communications to the entire Board or to the non-management directors. Such communications

must be clearly addressed to the Board or the

non-management directors and sent to either of the following:

•Lawton W. Fitt, Chairperson of the Board

email: chair@progressive.com

•Daniel P. Mascaro, Secretary

The Progressive Corporation

6300 Wilson Mills Road

Mayfield Village, OH 44143

or email: secretary@progressive.com

The recipient will promptly forward appropriate communications to the full Board of Directors or to the non-management directors, as specified by the sending party.

TRANSACTIONS WITH RELATED PERSONS

From time to time, we may enter into transactions with a director or executive officer, certain of his or her relatives, or an entity in which one or more of our directors or executive officers, or a relative of such person, is an owner, director, or executive officer. With limited exceptions relating to transactions made in the ordinary course of our businesses and certain low dollar transactions, such transactions must be disclosed to and approved by our Board of Directors under our Code of Business Conduct and Ethics. This policy is carried out by the Secretary of the company as transactions with such persons or entities, or proposals for such transactions, are identified by management or disclosed by members of the Board. The Board reviews these transactions as they are identified and, for ongoing transactions, on an annual basis thereafter.

During 2020, no transactions with related persons exceeding $120,000 in value were identified and reportable under SEC rules. For purposes of these disclosures, we exclude purchases of Progressive insurance policies, payments of claims required by our insurance policies, and other ordinary course transactions that did not exceed 1% of either our revenues or the other company's revenues for the year.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Mr. Farah (Chair), Mr. Bleser, Ms. Craig, and Ms. Snyder served as members of the Board’s Compensation Committee during 2020. There are no Compensation Committee interlocks.


REPORT OF THE AUDIT COMMITTEE The following Report of the Audit Committee does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other Progressive filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent Progressive specifically incorporates this Report by reference therein. The Audit Committee of the Board of Directors consists of the three directors named below, each of whom the Board has determined meets the applicable independence and experience requirements of the New York Stock Exchange and the Securities and Exchange Commission (SEC). In addition, the Board has determined that each of Dr. Nettles, Mr. Burgdoerfer, and Mr. Kelly is an Audit Committee Financial Expert, as that term is defined by the SEC. The Audit Committee is responsible, on behalf of the Board, for ensuring that the organizational structure, policies, controls, and systems are in place to monitor and accurately report the company’s performance. The committee monitors the integrity of the company’s financial statements, its financial reporting processes, its system of internal control over financial reporting, and the public release of financial information. In addition, the committee oversees the company’s compliance and ethics and enterprise risk management programs. During 2020, the committee held 10 meetings to review these matters and conduct other business. The committee also is directly responsible for the appointment, compensation, retention, and oversight of the company’s independent registered public accounting firm and for reviewing that firm’s independence. For 2020, the committee appointed PricewaterhouseCoopers LLP (PwC) as the company’s independent registered public accounting firm. The committee’s appointment of PwC was ratified by shareholders at the company’s 2020 Annual Meeting of Shareholders. In supervising the work of PwC on the 2020 audit, the committee has received the written disclosures and letter from PwC concerning its independence as required by the applicable requirements of the Public Company Accounting Oversight Board (PCAOB), and the committee has discussed with PwC its independence. In addition, the committee has reviewed, and discussed with PwC, among other matters: PwC’s report on its internal quality control procedures, including issues raised by governmental investigations of PwC in the preceding five years; the publicly available parts of the PCAOB’s report on its most recent inspection of PwC; regulatory developments during the year that impacted PwC’s audit work for the company or its communications with the committee; and the other matters that PwC is required to communicate to the committee under Auditing Standard No. 16, “Communication with Audit Committees,” as adopted by the PCAOB. The committee’s role relating to the financial statements is one of oversight. The company’s management has the primary responsibility for the financial statements and the reporting process, including the system of internal control over financial reporting. Management reports to the committee on financial, accounting, and operational developments that may impact the financial statements, and on issues relating to the company’s internal controls, among other matters. The committee also oversees the work of PwC and the company’s internal audit staff. During 2020, the committee discussed with PwC and the internal auditors the overall scope and plans for their respective audits. The committee then met with PwC and the internal auditors at various times throughout the year, with and without management present, to discuss the results of their examinations, evaluations of the company’s internal controls, the overall quality of the company’s financial reporting, and the critical accounting matters addressed during PwC's audit. Notwithstanding the committee’s oversight efforts, and the work performed by the company’s internal audit staff, PwC alone is responsible for expressing its opinion on the conformity of the company’s consolidated year-end financial statements with accounting principles generally accepted in the United States of America and its assessment of the effectiveness of the company’s internal control over financial reporting. In fulfilling its oversight responsibilities, the committee reviewed and discussed with management the company’s audited consolidated financial statements for the year ended December 31, 2020. These discussions included assessments of the quality, not just the acceptability, of the accounting policies used by the company, the reasonableness of significant judgments, and the clarity of disclosures in the financial statements. In addition, the committee has discussed with PwC its judgment as to the quality, not just the acceptability, of the company’s accounting policies. Based on the reviews and discussions referred to above, the committee recommended to the Board of Directors that the audited consolidated financial statements be included in The Progressive Corporation’s Annual Report on Form 10-K for the year ended December 31, 2020, for filing with the SEC. The committee has selected and retained PwC to serve as the independent registered public accounting firm for Progressive and its subsidiaries for 2021. Shareholders are being given the opportunity to vote on the ratification of this selection at the 2021 Annual Meeting of Shareholders. The committee operates under a written charter, the terms of which are reviewed annually by the committee. The current charter, as approved by the Board, is posted on the company’s website at progressive.com/governance. AUDIT COMMITTEE Patrick H. Nettles, Ph.D., Chair Stuart B. Burgdoerfer Jeffrey D. Kelly

SECURITY OWNERSHIP OF CERTAIN

BENEFICIAL OWNERS AND MANAGEMENT

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

The following information is set forth with respect to persons known to management to be the beneficial owners of more than 5% of Progressive’s common shares, $1.00 par value, as of December 31, 2020.


Name and Address of Beneficial Owner	Amount and Nature of Beneficial Ownership1	Percent of Class
The Vanguard Group Inc. 100 Vanguard Blvd. Malvern, PA 19355	48,263,533 2	8.2	%
BlackRock, Inc. and subsidiaries 55 East 52nd Street New York, NY 10055	44,189,367 3	7.6	%
Wellington Management Group LLP 280 Congress Street Boston, MA 02210	34,012,839 4	5.8	%

1The information contained in this table, including related footnotes, is derived from the Schedule 13G/A filings made by the identified beneficial owners as of December 31, 2020.

2The Vanguard Group Inc. has sole investment power over 45,683,579 shares, shared investment power over 2,579,954 shares, shared voting power over 979,501 shares, and does not have sole voting power over any shares.

3BlackRock, Inc. and its subsidiaries have sole investment power over 44,189,367 shares, sole voting power over 37,790,697 shares, and does not have shared investment or voting power over any shares.

4The securities held by the Wellington Management Group LLP, as parent holding company of certain holding companies and the Wellington Investment Advisers, are owned of record by clients of the Wellington Investment Advisers. Wellington Investment Advisors Holdings LLP controls directly, or indirectly through Wellington Management Global Holdings, Ltd., and the Wellington Investment Advisers (which includes Wellington Management Company LLP). Wellington Investment Advisors Holdings LLP is owned by Wellington Group Holdings LLP. Wellington Group Holdings LLP is owned by Wellington Management Group LLP. Each of the Wellington Management Group LLP, Wellington Group Holdings LLP and Wellington Investment Advisors Holdings LLP has shared investment power over 34,012,839 shares, shared voting power over 33,007,080 shares, and does not have sole investment or voting power over any shares. Wellington Management Company LLP has shared investment power over 32,340,826 shares, shared voting power over 31,816,020 shares, and does not have sole investment or voting power over any shares.

SECURITY OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS

The following information summarizes the beneficial ownership of Progressive’s common shares as of January 31, 2021 by each director of Progressive, each nominee for director, and each of the named executive officers (as identified in “Executive Compensation – Summary Compensation Table”) and all current directors and executive officers as a group. In addition, to provide a more complete picture of the economic interests of certain individuals in Progressive common shares, the final two columns include certain units held in our benefit and equity incentive plans that are equal in value to a share of our stock, but do not technically qualify as “beneficially owned” under the applicable regulations, also as of January 31, 2021.


Name	Total Common Shares Beneficially Owned1	Percent of Class2	Units Equivalent to Common Shares3	Total Interest in Common Shares and Unit Equivalents
John A. Barbagallo	96,067	*	16,976	113,043
Philip Bleser	16,134	*	1,134	17,268
Stuart B. Burgdoerfer	22,605	*	—	22,605
Patrick K. Callahan	13,148	*	112,684	125,832
Pamela J. Craig	7,016	*	114	7,130
Charles A. Davis	337,505	*	12,199	349,704
Roger N. Farah	107,260	*	27,963	135,223
Lawton W. Fitt	102,151	*	20,250	122,401
Susan Patricia Griffith	565,352	*	123,641	688,993
Devin C. Johnson	983	*	—	983
Jeffrey D. Kelly	67,037	*	—	67,037
Patrick H. Nettles, Ph.D.	125,430	*	40,084	165,514
John P. Sauerland	420,725	*	54,917	475,642
Michael D. Sieger	46,433	*	29,749	76,182
Barbara R. Snyder	29,944	*	14,640	44,584
Jan E. Tighe	2,358	*	2,063	4,421
Kahina Van Dyke	9,642	*	—	9,642
All 25 Executive Officers and Directors as a Group	2,153,192	*	575,549	2,728,741

*Less than 1% of Progressive’s outstanding common shares.

1 Total Common Shares Beneficially Owned is comprised of the following:


Name	Common Shares Subject to Restricted Stock Awardsa	Beneficially Owned Common Share Equivalent Unitsb	Other Common Shares Beneficially Ownedc
John A. Barbagallo	—	—	96,067
Philip Bleser	3,771	12,363	—
Stuart B. Burgdoerfer	2,222	—	20,383
Patrick K. Callahan	—	—	13,148
Pamela J. Craig	2,343	2,166	2,507
Charles A. Davis	3,905	10,768	322,832
Roger N. Farah	4,107	95,653	7,500
Lawton W. Fitt	6,329	86,433	9,389
Susan Patricia Griffith	—	—	565,352
Devin C. Johnson	983	—	—
Jeffrey D. Kelly	2,222	—	64,815
Patrick H. Nettles, Ph.D.	4,242	106,819	14,369
John P. Sauerland	—	—	420,725
Michael D. Sieger	—	—	46,433
Barbara R. Snyder	3,569	18,250	8,125
Jan E. Tighe	2,141	217	—
Kahina Van Dyke	3,569	—	6,073
All 25 Executive Officers and Directors as a Group	39,403	332,669	1,781,120

a Represents common shares held pursuant to unvested restricted share awards issued under The Progressive Corporation 2017 Directors Equity Incentive Plan. The beneficial owner has sole voting power and no investment power with respect to these shares during the restriction period.

b This number represents units (excluding dividend equivalents) that have been credited to the director's account under The Progressive Corporation Directors Restricted Stock Deferral Plan, as amended and restated (the “Directors Restricted Stock Deferral Plan”), under which each director has the right to defer restricted share awards, to the extent that distributions from the Directors Restricted Stock Deferral Plan will be made in Progressive common shares upon the termination of a director’s service as a director. As to the number of shares that will be so distributed, the director has the right to acquire those shares within sixty (60) days, and those shares are deemed “beneficially owned.” See “Director Compensation – Narrative Disclosure of Director Compensation Table” for a description of the Directors Restricted Stock Deferral Plan.

c Includes common shares held directly by the individual, holdings in our 401(k) plan, and shares held by, or for the benefit of, family members. For Mrs. Griffith, the amount includes a total of 91,746 common shares held in trust for the benefit of her spouse and 18,713 common shares held by her spouse in our 401(k) plan. For Mr. Sauerland, this amount includes 64,074 shares beneficially owned by his family members and related entities, of which he may be deemed a beneficial owner by virtue of voting, investment and dispositive power over such shares but in which he has no pecuniary interest. Mr. Sauerland disclaims beneficial interest over such shares.

2 Percentage based solely on “Total Common Shares Beneficially Owned.”

3 The units disclosed are in addition to “Total Common Shares Beneficially Owned” and have been credited to the individual’s account under one or more of our deferred compensation plans or equity incentive plans. In each case, the holder has neither voting nor investment power. Each unit is equal in value to one Progressive common share. Amounts in this column exclude outstanding performance-based restricted stock unit awards, due to the variable nature of such awards. See “Executive Compensation – Outstanding Equity Awards at Fiscal Year-End” for additional information on these awards.

Delinquent Section 16(a) Reports

Due to an administrative error on the part of the company, John J. Murphy, one of our executive officers, reported one sale transaction on January 13, 2020, two days late.

COMPENSATION DISCUSSION AND ANALYSIS

OVERVIEW

Our vision is to become consumers' and agents' number one choice and destination for auto, home, and other insurance. For many years, our goal has been to grow as fast as we can at a 96 or better combined ratio while continuing to deliver high-quality customer service. We believe that focusing on this goal will increase shareholder value over the long term.

We structure our executive compensation programs to support this goal, providing a strong alignment between pay and performance. We generally provide target compensation to our executives below the market median, with performance-based compensation providing upside potential when we perform well against pre-established and objective measures that we believe correlate to shareholder value. In addition, we provide a high percentage of total compensation to executives in the form of equity awards, and we believe that these awards support a strong pay-for-performance linkage and further align the interests of our executives with those of our shareholders.

We believe that our compensation programs have contributed to our exceptional, and profitable, growth in recent years. For example, over the past three years, we have profitably grown our net premiums earned (the source of virtually all of our non-investment revenue) by $13.5 billion, or 53%. During 2020, net premiums written and net premiums earned each grew by 8%, at a very profitable 87.7 combined ratio. We believe this performance well exceeds the underwriting performance of our industry peers.

In addition, our cumulative total shareholder return over the past five years exceeded that of the S&P 500 and our industry peer group by 2.5 times (x) and 2.7x, respectively, as disclosed in our performance graph in our 2020 Annual Report to Shareholders. See “Proxy Statement Summary” for annual financial results and shareholder return for 2020.

COMPENSATION HIGHLIGHTS FOR 2020

Consistent with prior years, the awards made in 2020 to our Chief Executive Officer and the other named executive officers or “NEOs” (identified in “Executive Compensation – Summary Compensation Table”) were heavily weighted toward at-risk, including performance-based, compensation.

CEO Compensation Decisions

At-risk annual cash incentive and equity awards represented over 96% of maximum potential compensation and 93% of target compensation

Salary increased 5.6% and remains well below the market median

Annual Cash Incentive (Gainsharing) could range from zero to 5.0x salary, with a 2.5x target

Equity awards:

•Time-based: 3.0x salary

•Performance-based at target:

•Insurance operations: 6.0x salary

•Investment results: 1.0x salary

CEO's equity ownership (as of January 31, 2021): Our CEO owned shares directly and in her 401(k) plan valued at 42x salary, well in excess of the 6x required by our Corporate Governance Guidelines.

Other Named Executive Officers

At-risk annual cash incentive and equity awards averaged 89% of maximum potential compensation and 80% of target compensation

Total salaries increased 4.8%, on average

Annual cash incentives varies by executive and could range between zero and 3.0x; targets range between 1.0x and 1.5x

Equity awards:

•Time-based: 1.0x salary

•Performance-based at target: 1.88x salary, on average

Equity ownership requirements (as of January 31, 2021): Each of the NEOs was in compliance with the expectation in our Corporate Governance Guidelines that they hold equity (including unvested equity awards) valued at a minimum of 3.0x salary.

2020 Say-on-Pay Vote

At our 2020 Annual Meeting of Shareholders, shareholders cast advisory votes on our executive compensation program, sometimes referred to as the “say-on-pay” vote. In that vote, shareholders approved our executive compensation program, with 96% of the votes cast in support. During 2020, the Compensation Committee of the Board of Directors reviewed these results with management. Due to the strong level of shareholder support and the absence of specific concerns expressed by shareholders, the committee determined that no specific actions with

respect to 2021 compensation should be taken as a result of the say-on-pay vote.

IMPACT OF COVID-19

Like other companies, COVID-19 impacted how we conducted our business beginning in March 2020. Within the span of a few weeks, 95% of our workforce was working remotely and we accelerated our investments in technological tools to ensure our employees could stay connected and be productive in the remote working environment. Throughout the year, we sold and serviced insurance policies, handled insurance claims, and continued to grow profitably. What we did stayed the same even though how we did it changed quite a bit.

Throughout 2020, we maintained our compensation philosophy and structure. Our performance measures were established prior to March 2020 and were consistent with our performance measures and goal-setting approach in recent years. We did not make any changes to the process or the performance measures in response to the pandemic.

While COVID-19 impacted our 2020 financial results, the pandemic did not meaningfully impact the payout under our 2020 annual cash incentive program (which we call Gainsharing) because our robust growth, which was the key driver of the payouts, was only impacted in a small way by the pandemic. The Gainsharing plan measures growth in policies in force (PIF) and profitability of each of our insurance business units. It is impossible to isolate with precision the impact that COVID had on these measures. However, we estimated the impact of the pandemic for each business unit, recalculated the Gainshare performance factor and determined that the impact on the performance factor was negligible. PIF growth during 2020 was initially impacted unfavorably by the pandemic, as shopping dropped precipitously, and then likely benefited somewhat from improved customer retention. Overall PIF growth of 11% for 2020 was similar to growth of 10% for 2019 and 12% for 2018. All but one of the vehicle business units’ combined ratios were more favorable in 2020 than in prior years due in part to lower loss costs resulting from changes in driving habits during 2020, even after the return of $1.1 billion to customers in the form of premium credits. The overall 2020 combined ratio of 87.7 compares to combined ratios of 90.9 for 2019 and 90.6 for 2018. If the 2020 Gainshare performance factor were to be recalculated using either 2019 or 2018 combined ratios, the Gainshare performance factor would be the same. The final 2020 Gainshare factor was 1.92, which was similar to the final 2018 and 2019 Gainshare factors of 1.91, reflecting significant profitable growth in each of those three years. Therefore, our assessment is that COVID did not

result in a Gainshare factor significantly different than we would have achieved absent the pandemic, and we believe that the payments under the 2020 Gainsharing Plan were appropriate and reasonable.

The performance period for the 2018 performance-based restricted stock unit awards ended on December 31, 2020. Most of these awards compare our growth over 2018-2020 to the market’s growth over the same period. The data on which we determine the final vesting factor for the awards that measure our growth versus the market will not be available until late in the second quarter or early in the third quarter of this year. We currently do not expect that the pandemic will impact the vesting factor for these awards.

We took a number of steps during 2020 to support our people during the pandemic. For the health and safety of our employees, we quickly moved as many employees as possible to work from home and implemented additional cleaning and physical distancing protocols at our offices. Recognizing the economic challenges faced by some of our people, we also made advances on Gainsharing payments to most of our people (but not our executives or other senior leaders). We established an employee relief fund to help our people dealing with financial difficulties and provided additional paid time off to employees who needed to care for themselves or family members. We also used various health and wellness communications, events, and activities to address the related anxiety and mental health stress our people may have experienced as a result of the pandemic.

OUR EXECUTIVE COMPENSATION PROGRAM

Our executive compensation program is designed and implemented under the direction and guidance of the Compensation Committee. Broadly stated, we seek to maintain a consistent executive compensation program with the following objectives:

•Attract and retain outstanding executives with the leadership skills and expertise necessary to drive results, build an enduring business, and create long-term shareholder value;

•Motivate executives to achieve our short- and long-term strategic goals;

•Reward performance and differentiate compensation based on variations in responsibilities, performance, and the achievement of challenging goals; and

•Align the interests of our executives with those of shareholders.

Progressive's executive compensation program is designed to serve the shareholders’ interests by

strongly tying our executives’ compensation to the achievement of important operating goals and the value of our common shares. As a result, while we seek to offer competitive salaries to our executives, the more significant aspects of our executive compensation program are annual cash incentive opportunities and equity awards.

As a general matter, executive salaries are intended to be somewhat lower than median amounts paid to executives who have similar responsibilities at comparable companies, while our annual incentive and performance-based equity programs provide the potential to earn above market median total compensation when the company achieves challenging goals designed into these plans.

While we consider market data when making decisions on executive compensation, variations occur for a number of reasons, including the unique nature of a specific executive’s responsibilities, individual performance, the tenure and experience of an executive, the executive’s future potential, and our business needs.

The following chart provides general information about the elements of compensation of our executive compensation program.

ELEMENTS OF COMPENSATION – 2020 DECISIONS AND AWARDS


		Element	Why We Use This Element
Fixed	Annual	Salary	Attract and retain executive talent and reward individual performance
Variable		Gainsharing cash incentive	Motivate executives to achieve challenging and objective operating goals in our insurance businesses Measures the annual growth in policies in force and profitability in our insurance businesses Provide executives with the potential (when combined with other compensation elements) to earn compensation above the market median
		Progressive Capital Management cash incentive	Motivate our investment professionals, including our Chief Investment Officer (CIO), to balance short- and long-term performance of our fixed-income portfolio with our investment goal of protecting our balance sheet Measures the performance of our fixed-income portfolio over a one-year and a three-year period against the performance results of a benchmark group Provide our CIO with the potential (when combined with other compensation elements) to earn compensation above the market median
	Long-Term	Performance-Based Restricted Stock Units: Growth in Market Share	Motivate executives to focus on longer-term operating performance of our insurance businesses Rewards our profitable growth in market share of our insurance businesses over a three-year period Align the interests of executives with those of shareholders by tying the value of compensation to the market value of our common shares Provide executives with the potential (when combined with other compensation elements) to earn compensation above the market median
		Performance-Based Restricted Stock Units: Investment Results	Motivate our CEO, CFO, and CIO to achieve longer-term fixed-income portfolio investment performance Measures the performance of our fixed-income portfolio over a three-year period against the performance results of a benchmark group Align the interests of these executives with those of shareholders by tying the value of compensation to the market value of our common shares Provide these executives with the potential (when combined with other compensation elements) to earn compensation above the market median
		Time-Based Restricted Stock Units	Further align the interests of executives with those of shareholders by tying the value of compensation to the market value of our common shares

Salaries

For 2020, annual salaries for our NEOs were as follows:


Name	2020 Salary1	Change From Prior Salary
Susan Patricia Griffith	$950,000	5.6	%
John P. Sauerland	650,000	4.0
Patrick K. Callahan	550,000	10.0
John A. Barbagallo	505,000	—
Michael D. Sieger	500,000	5.3

1Salary changes are typically implemented in January or February of each year, and 2020 included one more pay period than a typical year, so the annual numbers listed in the table differ from the salary amounts shown in "Executive Compensation – Summary Compensation Table."

After a review of market conditions, salary increases were provided in early 2020 where necessary to improve the competitive nature of our total compensation for our NEOs. After taking into account the increases, the 2020 salaries for each of the NEOs remained below the median for executives at comparable companies based on the data reviewed by the Compensation Committee in late 2019 (see “– Procedures and Policies – Compensation Comparisons” below, for further information on our market comparison process).

Annual Cash Incentive Payments (Gainsharing)

Gainsharing is designed to reward performance relative to our long-standing goal to grow as fast as possible at a 96 or better combined ratio while continuing to deliver high-quality customer service. We reinforce this goal through regular employee communications that also include the importance of following our Core Values in pursuit of that goal.

Our Gainsharing program has been around for nearly three decades and has been the primary vehicle to motivate and reward our employees to achieve our goal. While most companies of our size utilize some form of bonus program, all of our employees participate in Gainsharing, and we win or lose together based on our collective performance. We believe that Gainsharing is a differentiator and contributes to the “all for one and one for all” attitude that in part defines our culture.

The Gainsharing plan is currently comprised of five matrices that measure objectively our various products and channels. We use a different matrix for each line of business to reflect the different growth and profitability expectations given the wide variance in our market share across business lines and channels.

Gainsharing payments for NEOs are determined using the same performance criteria we use for the

Gainsharing payments for all of our employees, resulting in a consistent set of goals across our employee population. Gainsharing payments are determined using the following formula:

Paid
Salary

Target
Percentage

Gainshare (i.e.,
Performance)
Factor

SEC Form DEF 14A filed by Progressive Corporation (The)